Foreign affiliates - Economic globalisation
Statistics on the structure and activity of foreign affiliates (FATS) provide information that can be used to assess the impact of foreign-controlled enterprises on the European economy. The data may also be used to monitor the effectiveness of the internal market and the gradual integration of economies within the context of globalisation. One of the modes of supply of economic activities abroad is ‘Commercial presence’ by setting up foreign affiliates in the territory of another country.
As defined in FATS statistics, a foreign affiliate is an enterprise resident in one country which is under the control of an institutional unit resident in another country. Control is determined according to the concept of the 'ultimate controlling institutional unit' (UCI). The UCI is the institutional unit, proceeding up a foreign affiliate's chain of control, which is not controlled by another institutional unit.
Inward FATS are statistics describing the structure and activity of foreign affiliates resident in the reporting country and controlled by an UCIs resident in another country.
Outward FATS are statistics describing the structure and activity of foreign affiliates abroad controlled by an UCIs resident in the reporting country.
Before the FATS Regulation, the collection of FATS data delivered to Eurostat was based on gentlemen's agreements between Eurostat and the Member States.
At EU level, Regulation (EC) No 716/2007 of the European Parliament and the Council of 20 June 2007 on Community statistics on the structure and activity of foreign affiliates introduced the availability of harmonised annual data on foreign affiliates from reference year 2007 onwards, covering both inward and outward FATS.
FATS statistics are provided on the basis of the European business statistics (EBS) regulation starting with reference year 2021. More information on the changes and new data requirements introduced by the EBS regulation can be found in the Statistics Explained article on European Business Statistics.
The FATS recommendations manual provides the definitions and guidelines for national compilers and ensures meaningful and harmonised statistics at EU level. This manual will be updated in view of the new data requirements under the EBS Regulation. Pending this update, in 2019 the FATS Working Group agreed on a corrigendum to the FATS recommendations manual with some clarifications on the UCI, reflecting countries’ recent experience in identifying control structures of enterprise groups and foreign control over enterprises.
Further information on methodology is also available in the metadata files for outward FATS.